‘Record-shattering’ Q2 for digital health deals: Rock Health’s volte-face

July 11, 2017 | by

In a pirouette worthy of Nureyev in his prime, Rock Health’s latest Digital Health Funding review for Q2 and the first half of 2017 bangs the drum loudly. With $3.5 bn invested in 188 digital health companies, it’s a record in their tracking. (∗See below for their parameters, which focus on larger fundings and omit others by type.) Q2 reversed the muddling results of Q1 [TTA 11 April] and then some. If the torrid pace is maintained and the market doesn’t take a pratfall, this year will easily surpass 2016’s full year venture funding at $4.3 bn and 304 investments.

Looking at trends, the average deal size has ballooned to $18.7 million from the 2015-16 range of $14 million. Seven $100 million+ deals led the way: Outcome Health, Peloton, Modernizing Medicine, PatientPoint, Alignment Healthcare, PatientsLikeMe, and ShareCare. Of these, three are consumer health information (Outcome, PatientPoint, ShareCare), with PatientsLikeMe closely related with a patient community focus; as the lead category of investment overall, there’s now gold in consumer health. All seven businesses are located outside of Silicon Valley, a refreshing change. A surprise is Modernizing Medicine in the settled (we thought) EHR-clinical workflow category. There’s also an interesting analysis of the shift in top categories from last year to this, which takes out the $100 million+ deals (click to enlarge): [grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/07/Top-Funded-Categories-Midyear-Funding-Report-2017-1200×744.png” thumb_width=”200″ /]

Other changes from the usual: no IPOs and a slowing pace of M&A: 58 this year versus first half 2016’s 87 and full year 146. Their public company index is brighter, with positive gains in first half led by Teladoc (up 110 percent YTD), Care.com (up 80 percent), and consulting favorite Evolent Health (up 70 percent–with United Healthcare’s acquisition of The Advisory Board’s healthcare practice, can an acquisition be far away?). Remaining in the doldrums are NantHealth, Fitbit, and Castlight Health. Rock Health Digital Funding Review First Half 2017

Soon up will be StartUp Health’s first half analysis, which takes a different cut at the companies and looks at the balance of deals by funding series.

∗ Rock Health tracks deals over $2 million in value from venture capital, excluding government and grant funding. They omit non-US deals, even if heavily US funded; healthcare services companies (Oscar), biotech/diagnostic companies (GRAIL), and software companies not solely focused on healthcare (Zenefits), but include fitness companies like Peloton. 

Q1 digital health investment: two perspectives from StartUp Health and Rock Health

April 11, 2017 | by

StartUp Health’s and Rock Health’s investment/M&A roundups from Q1 2017 have just hit the deck. Before we dig into them, let’s start with the differences in methodology:

  • Rock Health tracks deals only over $2 million in value; StartUp Health seems to have no minimum or maximum; the latter includes early stage deals at a lower value.
  • StartUp Health gathers in international deals at all levels, whereas Rock Health includes only US-funded ventures.
  • Rock Health omits healthcare services companies (citing Forward, Oscar), biotech/diagnostic companies (GRAIL, Theranos), and software companies not solely focused on healthcare (Zenefits)
  • StartUp Health defines ‘digital health’ differently than Rock Health, with categories of ‘patient/consumer experience’, ‘wellness’, ‘personalized health/quantified self’, and ‘research’

StartUp Health is ‘over the moon’, breathlessly (appropriately as the home of the 25-year Health Moonshot) with Q1 trending, seeing the biggest investment quarter since 2010 at $2.5 bn. Topping up this number was GRAIL, which is developing a blood test for early cancer detection, with a massive Series B at $914 million. Far behind it in the $85-110 million range were (in descending order) Alignment Healthcare (population health), PatientsLikeMe (patient/consumer experience), Nuna (big data/analytics), and PointClickCare (EHR). Population health, patient/consumer experience, and research top their investment activity. Most deals are still seed and Series A (59 percent), but that is down five points from full year 2016; Series B’s share is up three points to 25 percent. But it remains a difficult bridge to cross to C+ rounds.

Rock Health splits the difference and calls it ‘business as usual’, surprised that there hasn’t been a tailspin. Its Q1 sandwiches between 2016 and 2015, well above 2015 but trending 23 percent below Q1 2016. Their biggest deals include the aforementioned Alignment, PatientsLikeMe and Nuna, omitting GRAIL and PointClickCare. Their top three investment categories are analytics/big data, care coordination, and telemedicine (over $50 million). Rock Health tracked almost 20 M&A, noting that many transactions are now ex-California. They also uniquely track public company performance. Here in 2016 is where Readers first noted weakness in NantHealth, but Fitbit and Castlight Health also had miserable quarters. Teladoc, Evolent Health (consulting), and Care.com had a good winter as well. Let’s see what Q2 brings.

The ‘right package of care’ sought for ‘bed-blockers’, home care (UK/US)

September 7, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/04/Thomas.jpg” thumb_width=”150″ /]’Bed-blocking’ as a signal failure of transitional care. Here is a term that may be unique to the UK, but not the problem: older people who cannot be discharged after an illness because there is no plan and no suitable place for transitional care and/or a safe return home with care. According to the Guardian, the term originated among UK healthcare managers and economists as early as the late 1950s as a marker of system inefficiency. The writer, Johnny Marshall, director of policy for the NHS Confederation, correctly notes that it should be a marker of “(a) system that has failed to move quickly enough to put together the right package of care to enable the person in the bed to return home” and that unfairly blames the patient. He gives examples of programs across Britain with home assessment and care, particularly for older people post-fall injury, that reduce or eliminate hospital days.

In the US, transitional care is pointing to a blend of home care tech/services. Some of the indicators for LTC support that Laurie Orlov points out in Tech-enabled home care — what is it, what should it be?: 

  • Assisted living growth is flat as this past weekend’s open can of soda–housing is chasing residents (though cost doesn’t seem to be following the usual supply/demand curve), the average resident is 87 years old and staying 22 months, and their net worth can’t afford present AL
  • There’s a huge and growing shortage of home care workers for an ever-increasing number of old and old-old
  • Yet finally big investment is taking place in tech-facilitated home care locating and matching: Honor.com, Care.com and ClearCare–a total of just under $150 million for the three

But can technology–front and back end–make up for the human shortage? And there’s a value in wearing the Quantitative Self hat here. (more…)